Paul Hsieh with an op-ed, giving the TennCare disaster as an example of government intervention failing:

The Tennessee government initially offered a generous benefits package. Predictably, costs skyrocketed because patients had no incentives to spend prudently. In response, the government attempted to control costs by slashing payments to doctors and hospitals.

Hospitals closed and doctors left the state in droves. Many doctors who remained stopped seeing TennCare patients since they lost money on each one. Families with sick children often had to drive long distances to find a doctor who would see them. And they had no alternatives to TennCare because the state regulations had all but destroyed the insurance market. Ironically, TennCare ended up causing the most harm to the very people it was intended to help – the working poor and rural patients.

Nor did TennCare save money. Instead, it nearly bankrupted the state budget.

The problems of TennCare are not aberrations that can be fixed with a few minor reforms. They are inherent in any system of government medicine. Under such systems, bureaucrats and politicians decide what care individuals can receive, not doctors and patients. This has long been the case in Canada’s “single-payer” socialized medical system, with its infamous waiting lists for critical medical tests and treatments. For the sake of my patients and myself, I don’t want this to happen in Colorado.